Neighborhood takes bite out of Big Apple
WOBURN, Mass.--Neighborhood Diabetes gained a foothold in New York City with its purchase in September of New York Diabetic Supply.
Terms of the deal were not disclosed, but New York Diabetic Supply had about 9,000 patients, said Paul Mudrick, president and owner of Central Capital, who advised on the sale.
The company will operate under the name Neighborhood New York Diabetic Supply. Neighborhood will retain the full staff, including founder Bernard Natt
The deal allows Neighborhood to grow in a market with an estimated 800,000 diagnosed diabetics, said Neighborhood CEO Tom Cronin.
“We had launched some independent efforts in New York but felt this was the right way to attain scale more quickly,” he said.
The Brooklyn-based New York Diabetic Supply’s philosophy of working closely with patients to help them stay healthier with diabetes meshed with Neighborhood’s, he said.
“We were surprised when we found another company that had our same model,” he said. “The fit seemed so natural.”
Neighborhood employs a “high touch” philosophy that includes initial home visits for newly diagnosed patients, who can get one-on-one training with a Neighborhood technician. After the initial visit, which can be tailored to individual needs, supplies are shipped via mail order.
Neighborhood offers a full range of diabetes testing supplies and personal care items; insulin pumps and supplies; and a diabetic medication pharmacy.
“It’s not just about providing supplies, but improving quality of life,” said Cronin. “They will be healthier and their outcomes better than people who are touched by other companies in our business.”
Just four years ago, Neighborhood was a regional player with 6,000 patients and $5 million in annual revenues. This year, the company is on track to earn nearly $50 million in revenues and serve 50,000 patients. Cronin predicts Neighborhood will increase another 50% over the next few years through organic growth.
In addition to New York, Neighborhood serves New England, Florida and Georgia, and has its an eye on Alabama and the Carolinas, said Cronin.
While Medicare and other payers have been shifting patients toward mail order as a way to cut costs, Cronin said it’s important to look at the bigger picture.
“I don’t think our model is the cheapest, but when it comes to diabetes, that shouldn’t be the goal,” he said. “The goal is to reduce the total cost and impact of diabetes. Testing supplies are a very small portion of total dollars spent.”